Can Getswift become the Facebook of last mile logistics? They think so.



The headline to this article was actually written a few weeks ago.

It was created for the launch of an InsideMarket.net blog and accompanying face-to-face video interview I did in Manhattan with Getswift's (ASX:GSW) two top executives, CEO Joel Macdonald and Executive Chairman Bane Hunter.

The video has been extremely popular and by far the highest viewed of our site so far.

But given the events of the past five ASX trading days that's not surprising and has led me to revisit the Facebook claim to see if it could be possible.

A week ago today (Thursday 30th November) Getswift placed itself in a voluntary trading halt on the ASX.

Getswift then held their AGM the next day, (Friday) and on the following Monday came out of the voluntary suspension.

Minutes before they did this they announced a multi-year agreement with the holding company (Yum) to provide Getswift Software as a Solution (SaaS) for global brands like:

KFC > Pizza Hut > Taco Bell

Getswift then backed up minutes later, announcing it had signed another global deal with:

Amazon

So here we are just four days after and Getswift has gone into another voluntary suspension.

Can Aussie company Getswift become the Facebook of last mile logistics?

Through our private InsideMarket Investment Fund we have been a shareholder in Getswift, on and off for the past 6 months or so.

At the time of writing we hold 30k shares.

But we did not take our position in Getswift because of the Facebook claim.

Instead, we make our personal investment decisions by looking for companies that pass a simple three question test.

1.Are they trying to create something really difficult?

2.Are the people working on the project really smart?

3.Is the potential market really, really big? We're talking massive!

If the answer is yes to all (and a lot of time and money is spent working on that) then we simply try and time our trades to minimize loss and maximize gains using technical support.

No rocket science there.

Also acknowledge there is no guarantee a trading halt means 'good news.'

Plus the irony of a trading halt on the anniversary of Pearl Harbor hasn't escaped us:)

So why did we invest and what of the Facebook claim?

Firstly on the question of has it been really hard to create?

Well, in our assessment creating a logistics app is on the lower-end of the scale.

But what Getswift has done that is really difficult/clever is create a Saas that can be used by virtually any industry with little or no additional tweaking.


"We constantly meet C-level executives (enterprise level global companies) who tells us the software looks as if it's been designed specifically for them," said Bane Hunter, Executive Chairman.

That 'horizontal' design strategy was no accident according to Getswift's Joel Macdonald, the founder and former delivery driver.

"Around 85% of our clients need no tweaking to suit their industry," said Macdonald.

When you consider they have diverse clients like Commonwealth Bank, Pizza Hut, Amazon and NA Williams (one of North America's largest auto parts distributors) to name a few, the 'horizontal strategy' claim seems to hold water.

But not only have they created a product that can suit the vast majority of large scale clients but it is very appealing to small businesses.

Getswift claims someone can set up and start using the SaaS in about 15 minutes.

Well, they're right because we tried it!

In fact it's actually very straight forward to go from signing up to being able to:

add delivery drivers, orders, automatically select assign nearest driver and send a message to your customer the moment the order leaves with an ETA.

I know from talking to Macdonald and Hunter that there's lots more the SaaS can do but that was just 15 minutes worth of my time and I was impressed.

Getswift's Saas is a pay-as-you go debit system that allows SME's to top up as much credit as they need.

Big enterprise deals like Amazon or NA Williams (expected to generate 1.15 billion transactions over the life of the contract) are obviously done on a negotiated rate.

But I do know that for SME's, similar delivery options for food services business can be very high.

One of my other businesses is a cafe and while there are many home delivery order services that let you plug into a big-base marketing system a la MenuLog or Deliveroo, they can take up to 30% of your order value!

Getswift charges $0.39 cents for its SaaS and as it is white label my little cafe can look pretty cool and be very efficient and transparent from a customer service point of view.

It is now in 70 plus coutnries and according to Hunter, "it's available in six languages but there are several more to come soon."

So we felt it ticked box one

1.Are they trying to create something really difficult?

as they are well down the tech development/validation timeline and have through it's signed clients like Amazon, clearly have answered questions two with a yes.

2.Are the people working on the project really smart?

On this point it is worth noting that their attitude according to Bane, and I paraphrase here, is "better to hire less people and make sure they're really smart." fits perfectly with ours.

They currently have around 250 staff and no sales people and yet have created a system that has 15 times the current demand capacity and operates in 60 countries already.

They also have no plans to hire sales people instead relying on word of mouth momentum which leads us to question 3 and all the events of the past five days or so:

3.Is the potential market really, really big? We're talking massive!

I have read some musings that go something like this: "It's all very well to sign Amazon but you've got to execute and roll out the SaaS before you start making any money."

There is no arguing the factual nature of that position.

But logic would dictate, to me at least, that if you are in 60 countries, multiple languages and more than 70 industry verticals execution is not a massive problem.

Yes, the Amazons and Yums of this world are a quantum leap in size and therefore scale of execution.

But given all the points I have covered, I am certainly comfortable with our investment position in Getswift.

As for the Facebook claim, well once the current suspension is lifted, if it is another global signing then I would have to suggest Bane Hunter could definitely be on to something.


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